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OnDeck Small Business Loans Review: Low Credit Requirements With High Rates

Published June 7, 2024
Brittney Myers
By: Brittney Myers
Brittney Myers
Brittney Myers
Writer

Brittney started her writing career in the world of science, putting her physics degree to good use. Her journey into finance started with building her personal credit, but soon grew into a borderline obsession with credit cards and travel rewards. For the last 7 years, she has enjoyed the ability to share her expertise with readers, as well as the opportunity to interview companies and individuals making an impact on our financial lives. She wholly believe most problems can be solved with the right research -- and a good spreadsheet -- and she specializes in translating complex financial topics into actionable advice to help educate and empower readers.

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Our Loans Expert

Ashley Maready
Check IconFact Checked Ashley Maready
Ashley Maready
Ashley Maready
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Ashley Maready is a former history museum professional who made the leap to digital content writing and editing in 2021. She has a BA in History and Philosophy from Hood College and an MA in Applied History from Shippensburg University. Ashley loves creating content for the public and learning new things so she can teach others, whether it's information about salt mining, canal mules, or personal finance.

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OnDeck small business loans offer multiple funding types to established, profitable businesses for owners with average credit who may struggle to find funding elsewhere. Interest rates are very high and loan terms are short, however. We'll cover the pros, cons, and everything else you need to know in this in-depth OnDeck review.

Ratings Methodology

OnDeck

Logo for OnDeck
Minimum Credit Score
625
Loan Amounts
Line of credit: $6,000 - $100,000, Term loan: $5,000 - $250,000
APR Range
Line of credit: 55.9% APR average, Term loan: 56.1% APR average
Term Length
Up to 24 months

OnDeck offers short-term loans to established business owners with at least average credit, provided they can meet the revenue requirement. Repayment terms cap at 24 months and APRs are very high, so these loans are best for owners without cheaper options who can repay the loan quickly.

  • Multiple loan types
  • Accepts average credit scores
  • No prepayment fee
  • APRs are extremely high
  • High revenue requirement
  • Personal guarantee required

Compare the best personal loans

Get the best rates and terms to fit your needs. Here are a few loans we'd like to highlight, including our award winners.

Lender APR Range Loan Amount Min. Credit Score Next Steps
7.80% - 35.99%
$1,000 - $50,000
None
11.49% - 20.49%
$2,000 - $30,000
720
6.99%-25.49% (w/ AutoPay)*
$5,000 - $100,000
Good credit

Full OnDeck small business loans review

This business loan is a good fit for: Owners with average personal credit who don't have less expensive loan options.

Top perks

Choose between a line of credit or a term loan: OnDeck offers two different types of loans depending on your needs:

  • Business line of credit: This is a revolving credit line that you can use again and again. You can draw funds as needed, then repay them to open up funds for a future draw.
  • Term loan: This is a one-time loan; once you repay the loan, your relationship with OnDeck is finished, unless you apply for another loan or a credit line.

Get accepted even with average credit: The feature that sets OnDeck apart from other business lenders is its lower personal credit score requirement. As the business owner, you only need a minimum FICO® Score of 625, which is solidly in the "fair" or "average" range. Other lenders require business owners to have good or even excellent personal credit to qualify.

Pay your loan off early with no prepayment fee: When APRs are this high, the best thing you can do is pay your loan off early. This can cut down how much interest you pay over the life of the loan and help you save money. Thankfully, OnDeck doesn't charge you any prepayment fees to do so. Some other lenders may actually charge you a fee to pay off your loan early, which can somewhat defeat the purpose.

What could be improved

Sky-high APRs make these loans expensive: The most important downside of OnDeck loans is that they are expensive. Not in origination fees -- those seem fairly standard -- but in interest fees. According to OnDeck, the average APR for a line of credit is 55.9% and the average APR for a term loan is 56.1%. This is very high. For reference, a typical small business credit card will have an APR in the 18% to 29% range. If you can qualify for a less expensive loan, definitely look elsewhere.

Business must have annual revenue of at least $100K: OnDeck has some very relaxed credit score requirements, but the other side of that coin is you need to show that you're good for the money some other way. In this case, it's by meeting the high revenue requirement. Specifically, businesses need to show at least $100,000 in annual revenue to be eligible for an OnDeck loan.

You must make a personal guarantee for the funds: Some business lenders may lend money to your business itself, without needing to know anything about the owner's personal credit. OnDeck is not one of those lenders. Not only will the owner's personal credit be important to approval, but you'll also need to personally guarantee the loan. This means that you'll be responsible for paying back the money even if your business fails or goes out of business.

Types of business loans offered by OnDeck

Loan type Amount Terms Repayment
Line of credit $6,000 - $100,000 12, 18, or 24 months Daily, weekly, or monthly payments
Term loan $5,000 - $250,000 Up to 24 months Daily or weekly payments
Data source: OnDeck.

How to qualify for an OnDeck small business loan

Qualifying for an OnDeck loan is fairly simply provided you meet the qualifications. You can apply online in just minutes. The basic qualifications are:

  • Your business must be at least one year old.
  • Your business must have an annual revenue of at least $100,000.
  • Your personal FICO® Score must be at least 625.
  • You must have a business checking account.

Application process and required documentation

You can apply online or by phone. Here's what's required:

  1. Fill out the application form. You'll need your business tax ID, Social Security number, and the last three months of your business bank statements, in addition to basic info about the business, the owner, and the loan you want.
  2. Consent to a soft credit check. OnDeck will check your personal credit score, but it won't impact your credit.
  3. If approved, choose a loan. You'll work with an OnDeck loan advisor to choose the best option.

This OnDeck small business loan is right for you if:

The best feature of an OnDeck small business loan is that you don't need perfect personal or business credit to get approved. That makes these loans an option for folks who can't find more affordable loans or lines of credit. However, given the high interest rates and short terms, you'd do well to explore other options before applying.

FAQs

  • No. OnDeck loans require a minimum FICO® Score of 625, which is considered to be in the "fair" or "average" range.

  • No. OnDeck has minimum score requirements for your personal credit score, but not your business credit score.

  • Funding time will vary. Some funds can be paid out as soon as the same business day.